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To Give Is to Get: Public Sector Stimulus Invites Private Sector Capital

by Drew Campbell

Private investors have raised more than $100 billion in equity capital for investment in global infrastructure markets during the past two years on the understanding that government budgets are strained and will not be able to meet demand for all the projects that are needed. In response to the global economic slowdown, however, the public sector is directing large sums of capital to infrastructure to help stem job losses and keep economies from tipping into depression. Despite the increased spending by governments, private investors will not be crowded out of opportunities, as public spending should open the door to more possibilities for private sector investment.

Governments from China to Germany are increasing funding for infrastructure projects both as a means of short-term economic stimulus and as a way to lay the foundation for long-term economic prosperity. According to Capitalizing on the Upcoming Infrastructure Stimulus, a report by CIBC World Markets s